OECD Issues the Record of Legislation with Qualified Status under the GloBE Rules

The Act of 6 November 2024 on the top-up taxation of constituent entities of multinational and domestic groups (GloBE Act) introduces a global minimum tax system (at least 15%) at the jurisdiction level.

Under the GloBE Act, entities belonging to multinational and domestic groups – with consolidated revenues exceeding €750 million in at least 2 of 4 years preceding the tax year – will be required to calculate the effective tax rate and any top-up tax. At the same time, the GloBE Act requires the submission of specific data (including GloBE returns) and payment of the tax. Generally speaking, these obligations will be fulfilled in the country of the constituent entity’s residence.

The GloBE Act implements Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union. In non-EU jurisdictions, the global tax rules are implemented according to the OECD’s Model Rules (Global Anti-Base Erosion Model Rules).

What does “Qualified Status” under the GloBE rules mean?

The application of GloBE rules is based on the so-called “common approach.” In practice, this means that countries implementing the GloBE rules should adopt them consistently. As a result, the GloBE regulations in particular countries will be assessed by the OECD based on their qualification status, i.e., whether these provisions ensure compliance with the results outlined in the relevant OECD documentation related to the GloBE rules (pages 3-4 of the justification for the GloBE Act).

The Directive strictly refers to the Model Rules and emphasizes in its preamble that the source of explanation for the provisions of the Directive – in case of interpretational doubts – should be all OECD documents concerning the given issue, including, in particular, the Model Rules and their commentary (pages 3-4 of the Justification).

In order to ensure consistent implementation of the GloBE rules, it is necessary to assess the systems in place in individual countries – a commitment made by the OECD (pages 3-4 of the Justification).

What is the role of the Central Record of Legislation with Qualified Status in GloBE taxation?

In light of the above circumstances, the OECD has established a central registry for national legislation with qualified status. It is worth noting that a “qualified rule” (e.g., the “qualified income inclusion rule”) represents a set of provisions in a country other than Poland – the respective jurisdiction should treat the collection of Polish GloBE provisions as “qualified.”

The registry lists countries whose GloBE provisions have undergone verification by the OECD and obtained “qualified” status. This document will be regularly updated with new jurisdictions that have gone through the so-called “fast-track process.”

Information about the registry was published on the OECD website (on January 15, 2025) as the Central Record of Legislation with Transitional Qualified Status. As of 13 January 13 2025 the record includes a list of qualified income inclusion rules (IIR) adopted in 27 countries, as well as a list of qualified domestic minimum top-up taxes and safe harbors for QDMTT covering 28 countries. At the moment, the record does not include Poland.

What are the consequences of obtaining Qualified Status for GloBE rules in a given country?

Verifying the status of a country’s provisions is crucial for applying GloBE rules. Thanks to the Record, the constituent entities of the group will know which GloBE rule should be applied towards other group entities. As stated in the Justification (p. 27): “(…) a taxpayer that is an intermediate parent entity will not be required to apply the IIR to its ownership interest in any low-taxed constituent entity if the ultimate parent entity of that group is required to apply the Qualified IIR for the same tax year.” On the other hand, the failure to implement the Qualified IIR in a given jurisdiction, in line with the Directive or Model Rules, opens the path for another jurisdiction to apply the Qualified UTPR (Undertaxed Payments Rule).

Based on the Record, the Minister of Finance will announce a list of jurisdictions that have qualified status. It should also be clarified that the legislation listed in the Record will be recognized as qualified from the date of its implementation into the legal system of the relevant country.